Stop me if you think you've heard this one before:
I've got this thorn in my side about the short end in a coma and heaven knows I'm miserable now.
The EDZ18 has fallen 63 bps since Sept and the EDZ19 has dropped 70. The decline has moved the relationship from 13 to 18+. Large on a percentage basis but still way too close for my liking. The EDZ21 back into 2019 is pancaked into 11.
The overall success (so far) of walking back the ZIRP has led many to suggest, rightfully so, that Janet (Sheila) take a bow. The ash heap of naysayers and bubblers has grown deep with the bones of the pedestrian populist fringe. Still, the somnambulist dirge higher in forward STIR is making me uncomfortable about the New Year. Under "normal" circumstances, the 33bps between the 2nd and 6th gyro would be closer to 150 by now. Careers were made buying the out narrow relationships and letting roll into wider near-bys.
Other developed country curves remain far more twisted and upside down than ours. That is a fact that only increases tolerance of the uncomfortable not acceptance. Discussions of the US yield curve have focused too far along the Ts while everyone's perfect math keeps the color coded Eurodollars in line. I'd keep an eye on 'em and remember its not the level - its the relationship between.
All rights to Johnny Marr.